But, hours later and after the market closed, Sports Direct told investors: "Further to recent press speculation in relation to Debenhams plc, Sports Direct confirms that it does not intend to make an offer to acquire the entire issued and to be issued ordinary share capital of Debenhams plc."

Mr Bentley, who had confirmed his departure from the Sports Direct board ahead of the AGM, later added: "I was asked a general question about whether or not we discuss our strategic investments, and in particular Debenhams, to which I replied in the positive.

"I made no mention of any merger between House of Fraser and Debenhams, nor did I intend my answer to infer that."

Debenhams, like its competitors in the department store sector, is suffering a string of challenges and drawing up plans to address them.

Its shares dived by 17% on Monday amid revelations it had brought in advisers with the company admitting it could sell non-core assets or consider following other struggling chains - such as Mothercare and Carpetright - in seeking a company voluntary agreement (CVA) to sharply reduce costs.

This would be expected to include the closure of some stores and reduced rents at others though the company has maintained its annual profit guidance of £33m.